Nutrisystem 2010 Annual Report Download - page 20

our ability to meet or exceed securities analysts’ expectations, recommendations by securities analysts, the
condition of the financial markets and other factors. These fluctuations, as well as general economic and market
conditions, may adversely affect the market price of our common stock and cause it to fluctuate significantly.
Future acquisitions and the pursuit of new business opportunities present risks, and we may be unable to
achieve the financial and strategic goals of any acquisition or new business.
A component of our growth strategy may be to acquire existing businesses or pursue other business
opportunities in the market for weight management and fitness products and services. Even if we succeed in
acquiring or building such businesses, we will face a number of risks and uncertainties, including:
• difficulties in integrating newly acquired or newly started businesses into existing operations, which
may result in increasing operating costs that would adversely affect our operating income and earnings;
• the risk that our current and planned facilities, information systems, personnel and controls will not be
adequate to support our future operations;
• diversion of management time and capital resources from our existing businesses, which could
adversely affect their performance and our operating results;
• dependence on key management personnel of acquired or newly started businesses and the risk that we
will be unable to integrate or retain such personnel;
• the risk that the new products or services we may introduce or begin offering, whether as a result of
internal expansion or business acquisitions, will not gain acceptance among consumers and existing
customers;
• the risk that new efforts may have a detrimental effect on our brand;
• the risk that we will face competition from established or larger competitors in the new markets we
may enter, which could adversely affect the financial performance of any businesses we might acquire
or start; and
• the risk that the anticipated benefits of any acquisition or of the commencement of any new business
may not be realized, in which event we will not be able to achieve any return on our investment in that
new business.
If we do not continue to receive referrals from existing customers, our customer acquisition cost may
increase.
We rely on word-of-mouth advertising for a portion of our new customers. If our brand suffers or the
number of customers acquired through referrals drops due to other circumstances, our costs associated with
acquiring new customers and generating revenue will increase, which will, in turn, have an adverse affect on our
profitability.
We use spokespersons to promote our products. If these spokespersons suffer adverse publicity, our
revenue could be adversely affected.
Our marketing strategy depends in part on celebrity spokespersons, as well as customer spokespersons, to
promote our weight management program. Any of these spokespersons may become the subject of adverse news
reports, negative publicity or otherwise be alienated from a segment of our customer base, whether weight loss
related or not. If so, such events may reduce the effectiveness of his or her endorsement and, in turn, adversely
affect our revenue and results of operations.
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